GENERAL AGREEMENT ON
TARIFFS AND TRADE
RESTRICTED
L/339
3 March 1955
Limited Distribution
CONTRACTING PARTIES
Ninth Session
REPORT OF WORKING PARTY 6 ON THE UNITED STATES WAIVER
The Working Party was asked to examine the request by the United States for
1.
a waiver of its obligations under the Agreement with respect to the use of
Section 22 of its Agricultural Adjustment Act (of 1933), as amended, and to
The reasons why
report its recommendations thereon to the CONTRACTING PARTIES.
the waiver was requested are set out in W.9/315 and the statement by the United
States representative in the plenary meeting is recorded in SR.9/33.
The
Working Party used as a basis of discussion a draft waiver submitted by the
United States delegation (W.9/170) and considered a number of amendments
proposed by other delegations with a view to clarifying the text or to providing
more safeguards in the event that the CONTRACTING PARTIES should decide to grant
the requested waiver.¹ The text of a draft Decision resulting from the
deliberations of the Working Party is given in Annex I.
2.
Many of the amendments suggested by members of the Working Party were
incorporated in the draft Decision.
Certain others, which were regarded by
some members of the Working Party as of major importance, were not included.
For example, in the view of certain delegations, any waiver granted should be
of defined scope and apply only to those products which were actually under
restriction; action by the CONTRACTING PARTIES in regard to any other products
which might be restricted in future under the law in question should be limited
to the giving of an assurance that sympathetic consideration would be given as
the cases arose. It was proposed by several members that the waiver should be
granted for a limited period of time or that it should be stipulated as a
condition that restrictions applied under it shall be eliminated by a specified
date.
The United States representative considered, however, that if either of
these amendments were incorporated in the waiver it would not suffice to meet
the need for which it was requested,
Section 22 requires the President of the
United States to act in certain defined circumstances. An amendment adopted
in 1951 provides that no international agreement entered into shall be applied
in a manner inconsistent with the provisions of Section 22,
The waiver was
required in order to remove any possible inconsistency between the obligations
of the United States under the General Agreement and that Section so as to
permit the fulfilment of this Congressional mandate.
The United States
representative considered that the same objection would, from his point of view,
arise to including in the waiver provisions for reviewing its operation as a
whole after a specified period.
In the light of this explanation the Working
Party did not include the conditions referred to above in the draft Decision.
¹Including
the proposals by Australia (W.9/183), Canada (W.9/186),Cuba (W.9/185)
and the United Kingdom (W.9/187).
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3. While agreeing to it being noted in the Decision that it was the intention
of the United States Govenment to continue to seek a solution of the problem
of surpluses of agricultural commodities, the United States representative was
unable to accept the suggestion that as a condition of the waiver the United
States Government should undertake to adopt measures to remove the underlying
causes of the situation which necessitates the application of restrictions
under Section 22. The position of the United States representative was that
many of the underlying causes were beyond the control of his Government and
that the measures contemplated would in many cases require legislative action
It was therefore beyond the competence of the United States
by the Congress.
Administration to promise their adoption.
4.
In submitting the annexed draft Decision, the Working Party was, however,
unable to submit at the same time an agreed recommendation regarding its
On the one hand, it generally recognized the reasons which led the
adoption.
United States to request for a waiver of such scope; it noted particularly
the practical reasons given by the United States representative during the
plenary discussion.
Though the measures in question had inevitably caused
damage to the interests of some contracting parties, the Working Party also
noted the generally careful and limited use which the United States had made
of Section 22 in the past.
On the other hand, however; several members of
the Working Party expressly reserved their position, particularly in view of
the fact that the conditions referred to in paragraphs 2 and 3 above were not
included. The following paragraphs are intended to record the agreed views
on the intent and purpose of some of the provisions of the draft Decision.
5.
It should be noted that throughout this proposed Decision the term
"restrictions", as defined in paragraph (b) of the second recital (containing
the statement by the United States), covers both fees and quantitative
limitations.
6.
By the draft Decision, a waiver would be granted to the United States of
its obligations under the provisions of Articles II and XI of the Agreement
to the extent necessary to prevent a conflict between such provisions and
action required by Section 22.
The reference to Article II was intended to
ever the cases where a fee was imposed under Section 22 on an item on which
the United States has assumed an obligation under that Article, in excess of
the rate of duty set forth in Schedule XX annexed to the Agreement.
In
requesting that the imposition of such fees be covered by the proposed waiver
rather than resorting to the procedures for modifying or withdrawing concessions.
in special circumstances during the period of firm validity of the Schedules,
the United States Government had in mind that any fees imposed for the purposes
of Section 22 would be of a temporary nature and would be subject to change at
short intervals, within the limits provided for in that law, according to
circumstances. The United States Government considered it undesirable to
disturb the general stability of the tariff bindings under the Agreement for
the purpose of securing such temporary derogations as required by the
implementation of Section 22.
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7.
In the clause beginning with the word "DECIDE"' it is stated that "the
text of Section 22 is annexed to this Decision." The purpose of this is to
define the substantive provisions of the law to which the waiver would refer.
8. In paragraph 2 of the Conditions and Procedures it is stated that the
United States will, in accordance with Article XXII of the Agreement, accord
to any interested contracting party the fullest notice and opportunity,
consistent with the legislative requirements of the United States, for
representations and consultation. Here the reference to the United States
"legialative requirements" is intended to cover the cases where the President
of the United States is required by law to take a decision on an application
for action under Section 22 within a time limit; it is not intended that the
scope or character of the consultations of Article XXII of the Agreement would
be in any way limited.
9. The purpose of reiterating in paragraph 4 that the obligations of the
Agreement are waived without prejudice to the right of the affected
contracting parties to have recourse to the appropriate provisions of
Article XXIII, is to re-emphasize that point in relation to the imposition
of restrictions on additional products and the extension or intensification
of existing restrictions, As the first DECLARATION clause indicates, the
right of other contracting parties to have recourse to the provisions of
Article XXIII is not limited to such cases only, but applies to the Decision
as a whole.
10. Finally, it might be noted that since the Decision refers to the
provisions of Articles II and XI of the Agreement, it does not affect the
obligations of the United States under any other provisions of the Agreement.
In particular, as its obligations under Article XIII are not affected, the
United States would acquire no right by virtue of this waiver to deviate
from the rule of non-discrimination provided for in that Article.
11. The United States delegation has submitted a schedule showing the
products which are at present subject to restriction, either in the form of
fees or quantitative limitations, under Section 22. This is annexed to
this Report for the information of the contracting parties (see Annex II).
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ANNEX I TO THE REPORT
PROPOSED DECISION TO GRANTA WAIVER TO THE UNITED STATES
IN CONNECTION WITH IMPORTRESTRICTIONS IMPOSED UNDER SECTION 22
OF THE UNITED STATES AGRICULTURAL ADJUSTMENT ACT (OF 1933),
AS AMENDED
HAVING RECEIVED the request of the United States Government for a waiver
of the provisions of Article II and Article XI of the General Agreement with
respect to certain actions by the United States Government required by the
provisions of Section 22 of the United States Agricultural Adjustment Act
(of 1933), as amended, (hereinafter referred to as Section 22) which are not
authorized by the Agreement,
HAVING ALSO RECEIVED
the statement of the United States:
(a) that there exist in the United States governmental
agricultural programmes (including programmes or operations
which provide price assistance for certain domestic
agricultural products and which operate to limit the
production or market supply, or to regulate or control the
quality or prices of domestic agricultural products) which
from time to time result in domestic prices being maintained at a level in excess of the prices at which imports
of the like products can be made available for consumption
in the United States and that under such conditions imports
may be attracted into the United States in abnormally large
quantities or in such manner as to have adverse effects on
such programmes or operations unless the inflow of such
imports is regulated in some manner;
(b) that the Congress of the United States therefore enacted
Section 22 which requires that restrictions in the form
either of fees or of quantitative limitations must be
imposed on imports whenever the President of the United
States finds, after investigation, that such products
are being or are practically certain to be imported in
such quantities and under such conditions as to render
ineffective or materially interfere with any programme
or operation undertaken by the United States Department
of Agriculture or any agency under its direction with
respect to any agricultural commodity or product thereof,
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or to reduce substantially the amount of any product
processed in the United States from any agricultural.
commodity or product thereof, with respect to which
such a programme is being undertaken, and has required
the President not to accept any international obligation
which would be inconsistent with the requirements of
the Section;
(c) that import restrictions can be imposed under Section 22
only when the President finds that imports are having or
are practically certain to have the effects for which
Section 22 action is required, and then, except as
provided by law in emergency situations, only after
investigation by the United States Tariff Commission,
after due notice and opportunity for hearing have been
given to interested parties; that while import restrictions may be imposed in emergency situations before an
investigation by the Tariff Commission, the continuance
of such restrictions is subject to the decision of the
President as soon as the Commission has completed an
immediate investigation; and that fees imposed under
Section 22 cannot exceed 50 per cent ad valorem and any
quantitative limitation of imports under that Section
cannot be such as to reduce the quantity of imports of
the product below 50 per cent of the quantity entered
during a representative period as determined by the
President; and that, except, in the case of those
products where it is impracticable to limit production
or marketings or the United States Government is
without legislative authority to do so, the products
on which Section 22 controls are now in effect are
subject to limitation upon domestic marketing which in
turn affect production;
NOTING:
(a) that, to help solve the problem of surpluses of products
for which Section 22 import quotas now are in effect,
the United States Government has taken positive steps
aimed at reducing 1955 crops supplies by lowering support
price levels or by imposing marketing quotas at minimum
levels permitted by legislation; and that it is the
intention of the United States Government to continue to
seek a solution of the problem of surpluses of
agricultural commodities:
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Page 6
(b) the assurance of the United States Government that
it will discuss proposals under Section 22 with
all countries having a substantial interest prior to
taking action, and will give prompt consideration to
any representations made to it;
(c) that it is the intention of the United States Government
promptly to terminate any restrictions imposed when it
finds that circumstances requiring the action no longer
exist, and to modify restrictions whenever changed
circumstances warrant such modification;
The CONTRACTING PARTIES
DECIDD, pursuant to paragraph 5(a) of Article XXV of the General Agreement
and in consideration of the assurances recorded above, that subject to the
conditions and procedures set out hereunder the obligations of the United
States under the provisions of Articles II and XI of the General Agreement are
waived to the extent necessary to prevent a conflict with such provisions of
the General Agreement in the case of action required to be taken by the
Government of the United States under Section 22, The text of Section 22 is
annexed to this Decision;
DECLARE that this Decision shall not preclude the right of affected
contracting parties to have recourse to the appropriate provisions of
Article XXIII; and
DECLARE, further, that in deciding as aforesaid, they regret that
circumstances make it necessary for the United States to continue to apply
import restrictions which, in certain cases, adversely affect the trade of
a number of contracting parties, impair concessions granted by the United
States and thus impude the attainment of the objectives of the General
Agreement.
Conditions and Procedures
1. Upon request of any contracting party which considers that its interests
are seriously prejudiced by reason of any import restriction imposed under
Section 22, whether or not covered by this Decision, the United States will
promptly undertake a review to determine whether there has been a change in
circumstances which would require such restrictions to be modified or
terminated. In the event the review shows such a change, the United States
will institute an investigation in the manner provided by Section 22.
2. Should the President of the United States acting in pursuance of
Section 22 cause an investigation to be made to determine whether any
existing import restriction should be modified, terminated or extended,
or whether restrictions should be imposed on the import of any additional
product, the United States will notify the CONTRACTING PARTIES and, in
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accordance with Article XXII of the General Agreement, accord to any
contracting party which considers that its interests would be prejudiced the
fullest notice and opportunity, consistent with the legislative requirements
of the United States, for representations and consultation.
3. The United States. will give due consideration to any representations
submitted to it including:
(a)
When investigating whether any existing import restriction
should be modified, terminated or extended, representations
that a greater volume of imports than is permitted under the
import restriction would not have the effects required to
be corrected by Section 22, including representations that
the volume of imports that would have entered in the absence
of governmental agricultural programmes would not have such
effects.
(b) When investigating with respect to import restrictions on
additional products, representations with regard to:
(i)
the effect of imports of any product upon any
programme or operation undertaken by the United
States Department of Agriculture or any agency
under its direction, or upon the domestic
production of any agricultural commodity or
product thereof for which such a programme or
operation is undertaken, including representations that the volume of imports which would
have entered in the absence of governmental
agricultural programmes will not have the effects
required to be corrected by Section 22;
(ii)
the representative period to be used for the
determination of any quota.
(c) Representations by any contracting party that the portion of
total quota allotted or proposed to be allotted to it is
inequitable because of circumstances that operated to reduce
imports from that contracting party of the product concerned
during the past representative period on which such import
a
quota is based.
As soon as the President has made his decision following any investigation
4.
the United States will notify the CONTRACTING PARTIESand those contracting
parties which have made representations or entered into consultations. If the
Decision imposes restrictions on additional products or extends or intensifies
existing restrictions the notification by the United States will include
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particulars of such restrictions and the reasons for them (regardless of
whethar the restriction is consistent with the General Agreement). At the
time of such notification the provisions of the General Agreement are waived
to the extent, necessary to permit such restrictions to be applied under the
General Agreemont, subject to the review herein provided and, as declared
above, without prejudice to the right of the affected contracting parties to
have recourse to the appropriate provisions of Article XXIII.
5.
The United States will remove or relax each restriction permitted under
this waiver as soon as it finds that the circumstances requiring such
restriction no longer exist or have changed so as no longer to require its
imposition in its existing form.
6.
The CONTRACTING PARTIES will make an annual review of any action taken
by the United States under this Decision. For each such review the United
States will furnish a report to the CONTRACTING PARTIES showing any modification or removal of restrictions effected since the previous report, the
restrictions in effect under Section 22 and the reasons why such restrictions
(regardless of whether covered by this waiver) continue to be applied and any
steps it has taken with a view to a solution of the problem of surpluses of
agricultural commodities.
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ANNEX TO THE PROPOSED DECISION
SECTION 22 OF THE AGRICULTURAL ADJUSTMENT ACT (OF 1933),
AS RE-ENACTED AND AMENDED
Section 22 (a) Whenever the Secretary of Agriculture has reason to
believe that any article or articles are being or are practically certain to
be imported into the United States under such conditions and in such quantities
as to render or tend to render ineffective, or materially interfere with, any
program or operation undertaken under this title or the Soil Conservation and
Domestic Allotment Act, as amended, or section 32, Public Law No. 320,
Seventy-fourth Congress, approved 24 August 1935, as amended, or any loan,
purchase, or other program or operation undertaken by the Department of
Agriculture, or any agency operating under its direction, with respect to any
agricultural commodity or product thereof , or to reduce substantially the
amount of any product processed in the United States from any agricultural
commodity or product thereof with respect to which any such program or
operation is being undertaken, he shall so advise the President, and, if the
President agrees that there is reason for such belief, the President shall
cause an immediate investigation to be made by the United States Tariff
Commission, which shall give precedence to investigations under this section
to determine such facts. Such investigation shall be made after due notice
and opportunity for hearing to interested parties, and shall be conducted
subject to such regulations as the President shall specify (7 U.S.C. 624 (a)).
(b) If, on the basis of such investigation and report to him of findings
and recommendations made in connection therewith. the President finds the
existence of such facts, he shall by proclamation impose such fees not in
excess of 50 per centum ad valorem or such quantitative limitations on any
article or articles which may be entered, or withdrawn from, warehouse, for
consumption as he finds and declares shown by such investigation to be
necessary in order that the entry of such article or articles will not render
or tend to render ineffective, or materially interfere with, any program or
operation referred to in sub-section (a) of this section, or reduce
substantially the amount of any product processed in the United States from
any such agricultural .commodity or product thereof with respect to which any
such .program or operation is being undertaken: Provided, That no proclamation
under this section shall impose any limitation on the total quantity of any
article or articles which may be entered, or withdrawn from warehouse, for
Consumption which reduces such permissible total quantity to proportionately
less than 50 per centum of the total quantity of such article or articles
which was entered, or withdrawn from warehouse, for consumption during a
representative period as determined by the President: And provided further,
That in designating any article or articles, the President may describe them
by physical qualities, value, use, or upon such other bases as he shall
determine. In any case where the Secretary of agriculture determines and
reports to the President with regard to any article or articles that a
condition exists requiring emergency treatment, the President may take
immediate action under this section without awaiting the recommendations of
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the Tariff Commission, such action to continue in effect pending the report
and recommendations of the Tariff Commission and action thereon by the
(7 U.S.C. 624. (b)).
President.
(c) The fees and limitations imposed by the President by proclamation
under this section and any revocation, suspension, or modification thereof,
shall become effective on such date as shall be therein specified, and such
fees shall be treated for administrative purposes and for the purposes of
section 32 of Public Law No. 320, Seventy-fourth Congress, approved
24 August 1935, as amended, as duties imposed by the Tariff Act of 1930, but
such fees shall not be considered as duties for the purpose of granting any
preferential concession under any international obligation of the United States
(7 U.S.C. 624 (c)).
(d) After investigation, report, finding, and declaration in the manner
provided in the case of a proclamation issued pursuant to sub-section (b) of
this section, any proclamation or provision of such proclamation may be
suspended or terminated by the President whenever he finds and proclaims that
the circumstances requiring the proclamation or provision thereof no longer
exist or may be modified by the President whenever he finds and proclaims that
changed circumstances require such modification to carry out the purposes of
this section (7 U.S.C. 624 (d)).
(e) Any decision of the President as to facts under this section shall
be final (7 U.S.C. 624 (e)).
(f) No trade agreement or other international agreement heretofore or
hereafter entered into by the United States shall be applied in a manner
inconsistent with the requirements of this section (7 U.S.C. 624 (f)).
PUBLIC LAW 50.
Eighty-second Congress,
SECTION 8 (a)
In any case where the Secretary of Agriculture determines and reports to
the President and to the Tariff Commission with regard to any agricultural
commodity that due to the perishability of the commodity a condition exists
requiring emergency treatment, the Tariff Commission shall make an immediate
investigation under the provisions of section 22 of the Agricultural
Adjustment Act, as amended, or under the provisions of section 7 of this
Act to determine the facts and make recommendations to the President for
such relief under those provisions as may be appropriate. The President may
take immediate action, however, without awaiting the recommendations of the
Tariff Commission if in his judgment the emergency requires such action. In
any case, the report and findings of the Tariff Commission and the decision
of the President shall be made at the earliest possible date and in any event
not more than25 calendar days after the submission of the case to the Tariff
Commission.
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ANNEX II TO THE REPORT
COMMODITIES FOR WHICH IMPORT CONTROLS ARE NOW IN EFFECT PURSUANT
TO SECTION 22 OF THE AGRICULTURAL ADJUSTMENT ACT (of 1933) AS AMENDED
A - Quotas
1.
Cotton and cotton products
Annual quotas currently are in effect for these items:
(a) Long staple cotton
(1-1/8 in. or longer but
less than 1-11/16 in.)
(b) Short staple cotton
(other than harsh, under
1-1/8 in.)
(c) Harsh or rough
(under 3/4 inch)
(d) Cotton waste
2.
Quota
45,656,420 lbs.
14,516,882 lbs.
70,000,000 lbe.
5,482,509 lbs.
Wheat and wheat products
Quota
(a) Wheat
(b) Wheat products
(flour, semolina, crushed
800,000 bu.
4,000,000 lbs.
or cracked wheat, and similar
wheat products)
3.
Manufactured dairy
July 1, 1953.)
products (Initial
controls effective
Annual quotas have been established for these items:
707,000 lbs.
Butter
7,000 lbs.
Dried whole milk
496,000 lbs.
Dried butter milk
500 lbs.
Dried cream
lbs.
1,807,000
Dried skim milk
Malted milk and compounds or mixtures of
6,000 lbs.
or substitutes for milk or cream
2,780,100 lbs.
Cheddar cheese
4,600,200 lbs.
Edam and Gouda cheese
4,167,000 lbs.
Blue mold cheese²
9,200,100 lbs.
cheese³
Designated Italian type
¹ Cheddar cheese and cheese and substitutes for cheese containing or
processed from cheddar cheese.
² Blue mold (except Stilton) cheese and cheese and substitutes for
cheese containing, or processed from, blue mold cheese.
³ Italien type cheeses made from cows' milk in original loaves (Romano
made from cows' milk,Reggiano ,Parmesano,Provolone ,Provotelle ,and Sbrinz ).
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4.
Peanuts - Annual global quota of 1,709,000 pounds shelled
basis, July 1 - June 30.
5.
Oats¹ hulled or unhulled and unhulled ground
controls effective December 23, 1953.)
oats (Initial
Imports are limited to 40,000,000 bus. during the period
Oct. 1, 1954 - Sept. 30, 1955.
6.
Rye¹,
rve flur and meal
1954.)
(Initial controls effective April 1,
Imports are limited to 186 million pounds in the period
July 1, 1954 - June 30, 1955.
7.
hulled or unhulled, including rolled barley, ground
Barley¹,
barley,and barley malt (Initial controls effective October 1,
1954.)
Imported are limited to 27,500,000 bushels in the period
October 1, 1954 - September 30, 1955.
B
Fees
8.
Filberts --
the period Oct. 1, 1954 - Sept. 30, 1955 a
fee of 10 cents per pound on imports in excess of
During
6 million pounds.
9.
Almonds2 - During the period Oct.1, 1954 - Sept. 30, 1955
a fee of 10 cents per pound on imported in excess of
5 million pounds.
10.
Flax seed² 50 per cent ad valorem
11.
Linseed oil² 50 per cent ad valorem
12.
Peanut oil² ad valorem fee of 25 per cent on imports in exceas
of
80,000,000 pounds.
1 Seed approved for planting pursuant to the Federal Seed Act is not
subject to control.
2 Not a listed item in Schedule XX.c
X.
ic: